August 12, 2014 at 3:01 PM
During the Lower Providence Township board of supervisors meeting last week, Township Manager Richard Gestrich gave the supervisors and residents in attendance an update on the municipality’s finances. With the close of the year’s second quarter in June, Gestrich said the township seemed to be doing well, in what he called “winning a game of percentages.”
With only half the year over, Gestrich and the township’s finance committee decided to operate three unique tests to see how the budget was lining up.
“The good news is, we passed all three tests,” said Gestrich.
In summary, Gestrich said that the township was ahead of expenditures, having saved $845,014 over where the budget would assume the township to be at this date.
“But, don’t get excited,” he noted. “We’ve already gotten most of the real estate taxes in the first half of the year.”
Still, the manager was optimistic about the progress thus far.
“Little bit, by little bit, the revenue and expenditures are quietly combining to reduce the budget deficit for 2014,” he said.
Gestrich explained that in the first test, a simple review of the expenditures versus revenues would show the township to be ahead of schedule by around $1.3 million, a favorable balance. But, as he had previously noted, because so much of the real estate tax money comes early in the year, this is a “skewed” view of the facts.
A second test operates by analyzing percentages, said Gestrich. He and the committee broke down the balances of accounts and figure that to be “on target” by the year’s end, the township would need to have five to seven percent minimum balance of the general fund.
After a few math equations, the township is currently resting around 30% balance in the fund, well over the required estimated amount, thus passing the second test.
A third, more in depth analysis of the budget showed the most accurate six-month review of the funds. Gestrich said that 93 percent of all real estate taxes are in for the year. Both the real estate and earned income taxes, however, are tracking slightly higher than expected, causing a small increase in revenue for the township.
While June figures saw numbers still lagging when it comes to real estate transfers, Gestrich said a quick peek at July shows the numbers are “starting to come back into the normal range.”
Largely, the township was operating at expected budget costs. It was Old Man Winter that put the only dents in the plans.
Gestrich said the only overages in expected budget included:
· Snow removal (over 124%)
· Heating oil (over 81%)
· Gas propane (over 113%)
· EOC Operations
Gestrich said that, despite these overages in spending, a third test used to “smooth out the numbers” for the year shows the township is still on track. In the end, he said, it was still a game of percentages, but all said and done, the township was “winning” that battle.
“The revenue is coming in around two percent high,” said Gestrich. “Expenditures are running three percent low. We are winning the game of percentages.”
The harsh winter also put a dent in the road construction budgets, as the township had hoped only to do Rittenhouse Road this summer, but instead had to add Church, Crawford and Surrey Lane, as well. Thanks to a low-interest loan over 10 years, the township was able to finance both 2014 and 2015 costs.
“We’ve put together a five-year road resurfacing project, and the increased spending is coming from [covered costs] the liquid fuels budget, and not a tax increase,” said Gestrich.
Township Supervisor Don Thomas asked if there was any particular savings being seen overall.
“Is this just ‘oh we got paper clips on sale’ and bought toilet paper in bulk, or is there any highlights?” he asked.
Gestrich said the township was “doing well on legal,” and that coupled with earned income tax being up helped to save money.
For more information on the township’s finances, view the above photos of Gestrich’s slides presented to the supervisors last week.